Crouch v. Mo-Kan Iron Workers Welfare Fund

• Decision Date: 03 August 1984
• Docket Number: MO-KAN,I,No. 82-1081,No. 10,10,82-1081
• Citation: 740 F.2d 805
• Parties: 5 Employee Benefits Ca 1971 Luella CROUCH, Plaintiff-Appellant, v.IRON WORKERS WELFARE FUND, Mo-Kan Iron Workers Pension Fund, International Association of Bridge, Structural and Ornamental Iron Workers Local Unionnternational Association of Bridge, Structural and Ornamental Iron Workers, Robert Pfister, and Allen Thompson, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 805

740 F.2d 805

5 Employee Benefits Ca 1971

Luella CROUCH, Plaintiff-Appellant, v. MO-KAN IRON WORKERS WELFARE FUND, Mo-Kan Iron Workers Pension Fund, International Association of Bridge Structural and Ornamental Iron Workers Local Union No. 10 International Association of Bridge, Structural and Ornamental Iron Workers, Robert Pfister, and Allen Thompson Defendants-Appellees.

No. 82-1081.

United States Court of Appeals Tenth Circuit.

Aug. 3, 1984.

William A. Larson of Gehrt & Roberts, Topeka, Kan., for plaintiff-appellant.

Steve A.J. Bukaty of Blake & Uhlig, Kansas City, Kan., for defendants-appellees Intern. Ass'n of Bridge, Structural and Ornamental Iron Workers Local Union No. 10; Intern. Ass'n of Bridge, Structural and Ornamental Iron Workers, Robert Pfister, and Allen Thompson.

Albert J. Yonke, Kansas City, Mo. (Michael G. Newbold, of Yonke, Shackelford & Arnold, Kansas City, Mo., and George A. Groneman, Kansas City, Kan., with him on the brief), for defendants-appellees Mo-Kan Iron Workers Welfare Fund and Mo-Kan Iron Workers Pension Fund.

Before BARRETT, McKAY and LOGAN, Circuit Judges.

LOGAN, Circuit Judge.

Plaintiff Luella Crouch appeals an order granting summary judgment to all defendants in an action she brought pursuant to the Employee Retirement Income Security Act (ERISA), 29 U.S.C. Sec. 1132(a). Crouch sought a declaration of entitlement to welfare and pension plan benefits, reinstatement to her secretarial position, and damages for constructive discharge and outrageous conduct. Defendants are her former employer, the International Association of Bridge, Structural and Ornamental Iron Workers Local Union No. 10 (local union), two officers of the local union, Robert Pfister and Allen Thompson, the International Association of Bridge, Structural and Ornamental Iron Workers (international union), the Mo-Kan Iron Workers Welfare Fund, and the Mo-Kan Iron Workers Pension Fund.

The district court granted summary judgment on plaintiff's claims for pension and welfare benefits and for damages for constructive discharge principally because it concluded that plaintiff was not entitled to coverage under the plans. The international union prevailed on summary judgment because it was not a party to the trust indentures creating the plans and because the local union was not the international's agent in dealing with plaintiff. The district court found that plaintiff's outrageous conduct claim failed to meet the requirements of Kansas law. We affirm in part and reverse in part.

I

A

Plaintiff worked as a secretary in the local union's office in Topeka, Kansas from 1966 until December 1978. Plaintiff was paid for working thirty hours per week until her last few days of employment, when her work week was reduced to eighteen hours. The local union never made any payments to the welfare fund or to the pension fund on her behalf. The local union officers, who were also trustees of the welfare and pension plans, apparently assumed that the payments were optional because the local union never expressly agreed to make those payments. The local union, however, made payments into both the pension fund and the welfare fund on behalf of the officers of the local union. It also made payments to the welfare fund on behalf of one secretary in the local's Kansas City office during the last few years of plaintiff's employment.

The Mo-Kan Iron Workers Welfare Fund was created effective January 1, 1963, and amended and restated in 1976 to meet ERISA requirements. The Mo-Kan Iron Workers Pension Fund was created effective July 1, 1970, and amended and restated in 1976 to meet ERISA requirements. Parties to the agreements are the Builders Association of Missouri and the local union. The welfare and pension plans contain virtually identical definitions and descriptions of persons covered. Both plans cover employees of members of the builders association, employees of other companies with whom the union had collective bargaining agreements, and employees of the union (and of the plans themselves) not covered by a negotiated collective bargaining agreement. The term "employer" is defined as including any member of the builders association "who is a party to, or otherwise bound by, a collective bargaining agreement with the Union requiring payments to the Trust Fund with respect to employees represented by the Union," Art. IV, Sec. 2(a) (both plans), and "the Union as to the employees of the Union." Id. Sec. 2(d) (both plans). "Employee" is defined as a person employed by an employer "for whom the employer is required to make contributions," id. Sec. 3(a) (both plans), and "[a]ny employee of the Union," id. Sec. 3(b) (both plans). The plans define a "participant" as "any employee ... of an employer who is, or may become, eligible to receive any type of benefit from this Fund." Art. IV, Sec. 12 (both plans). A "covered person" means an "employee for whom payments are made to the Fund as provided by a collective bargaining agreement or who comes within the definition of 'employee' as defined herein." Art. IV, Sec. 14 (both plans). The portion of the agreements dealing with the transmittal of funds on behalf of the participants states that "each employer shall pay to the Fund for each employee defined herein the amount required by the collective bargaining agreement." Art. VIII, Sec. 2 (welfare plan); Art. VII, Sec. 2 (pension plan). The plans do not specifically require any minimum number of hours of employment to qualify as an employee, participant or covered person.

The record also contains a summary description of the welfare plan. That description, distributed in booklet form to the employees, obviously is geared to those employees covered by collective bargaining agreements. Thus, the summary plan description states that the collective bargaining agreement between the builders association and the local union "in effect at the time this booklet was printed, determine[s] the rate at which employers contribute to the Plan and the employees on whose behalf contributions are made." R. I, 98. Other portions of the summary plan description describe eligibility in terms of "hours of contributions," R. I, 100, or "employment for which contributions are paid," R. I, 101. The summary plan description does mention eligibility for welfare benefits, stating that the employee is eligible if he has "contributions for 1,000 or more hours of employment" during the prior twelve-month period. R. I, 134. The summary plan description nowhere identifies local union employees as persons entitled to contributions to the welfare plan. Further, none of the materials specifically state that contributions on behalf of employees of the local union covered by either or both plans must be the same as the amounts set out in collectively bargained agreements, although the union apparently uses that rate when it transmits contributions. See Brief of Appellant Exh. "B."

To resolve the issues in this case we must also consider federal law, ¹ because the trust and welfare plans require administration in compliance with the provisions of the Labor Management Relations Act of 1947, ERISA, and all applicable rules and regulations of the United States Department of Labor and the Internal Revenue Service. Art. III (both plans). Each plan also declares that

"The Plan adopted by the Trustees shall be such as will qualify for approval by the U.S. Treasury Department, Internal Revenue Service and the Department of Labor, and as will continue as a qualified plan. The Trustees are authorized to make whatever applications are necessary with the said Internal Revenue Service and Department of Labor to receive and maintain approval of the plan."

Art. IX, Sec. 8 (welfare plan); Art. VIII, Sec. 8 (pension plan). Additionally, the plans provide that, "All questions pertaining to the validity, construction and administration shall be determined in accordance with the laws of the State of Missouri and with ERISA and regulations adopted pursuant thereto subsequent to the effective date of ERISA." Art. XIV, Sec. 3 (welfare plan); Art. XIII, Sec. 3 (pension plan).

B

We first consider whether plaintiff is entitled to benefits under the welfare plan. The union did not promise plaintiff welfare plan benefits. The local union, which had primary responsibility for determining entitlement to coverage, construed the plan to exclude plaintiff. The fund managers denied coverage also, although based on their failure to receive contributions on her behalf. R. I, 137-141. The language of the plan can be read as covering all union employees, but we do not think that is a required reading. The plan is ambiguous with respect to the amounts to be paid in for union employees. The plan apparently contemplates a decision by the union to cover its employees by submitting payments on their behalf in some particular amount. The only document that can be considered an election by the union to make payments on behalf of its employees consists of the monthly submission sheets, and plaintiff was not included in any of them. Furthermore, welfare benefit plans are exempt from the participation, vesting, and funding requirements applicable to pension plans. See 29 U.S.C. Secs. 1051(1), 1081(a)(1). Thus, the law permits a welfare plan to discriminate against particular employees. In light of this and the ambiguities in the plan, we must hold that the union and the plan managers' conclusion that plaintiff was not covered by the plan is not arbitrary, capricious, or contrary to the plan.

C

Although the language of the welfare plan is almost identical to the language of the pension plan, we hold that plaintiff is entitled to benefits under the pension plan. Nothing in the portion of ERISA contained in the labor sections of the Code expressly exempts pension plans from the minimum participation, vesting, and funding requirements of ERISA. Rather, 29 U.S.C. Sec. 1052(a) expressly sets forth...